You can make a payment claim to receive anything that is owed to you for construction work or goods and services you have provided under the terms of a contract or within the last 12 months (whichever is the later). This applies if you are a:

Only one claim can be made for each reference date. This is the date stated in the contract for making claims. If there is none, it is the last day of each month. If money has not been paid for a previous claim, this can be included in the next claim.

make a written claim, stating the amount due and describing the construction work, related goods or services which you are claiming

serve the claim to the respondent at the time specified in the contract or on or after each reference date in person, by post or fax (or in any other additional way outlined in the contract)

record the date when the respondent receives the claim

if you are a subcontractor and the contract is connected with a residential construction contract, include a statement indicating that: "This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 NSW".

When a head contractor serves a payment claim to a principal, they must provide a supporting statement. In it, the head contractor must declare that they have paid all payments to subcontractors they have engaged for the construction work. The Supporting Statement must be in the form contained in Schedule 1 of the Building and Construction Industry Security of Payment Regulation 2008. Download a supporting statement by head contractor form.

IMPORTANT: Knowingly providing false or misleading information on a supporting statement can lead to a maximum $22,000 penalty and/or 3 months imprisonment.

The Act does not apply to contracts made directly with a person who is a homeowner who lives in, or intends to live in, the dwelling where work is carried out and the work undertaken is:

residential building work where the total cost of labour and materials is more than $5,000 or

electrical wiring work or

plumbing, draining and gas fitting work or

air conditioning and refrigeration work (except plug-in appliances)

These are ‘exempt residential construction contracts’ covered by the Home Building Act 1989.

However, the Act covers all work where the home owner engages a head contractor, who then subcontracts out that work. This includes all work, materials and plant supplied by subcontractors, consultants and suppliers. For example, if a home owner engages a head contractor, who then subcontracts part of that work to a plumber, the plumber can make a progress payment claim to the head contractor. This exemption does not apply to residential work involving investment properties, strata scheme owners corporations or developers for example.

This depends on who makes the payment claim. Unless stated in the contract, the due date for payment is:

15 business days after the claim is made for a head contractor, claiming from the principal

30 business days after the claim is made for a subcontractor (excluding exempt residential work)

10 business days after the claim is made for a subcontractor, doing related exempt residential work.

A contract may specify earlier payment due dates than those stated above, but not later.

If you are not paid by the due date, you have a right to claim interest at the rate specified in the contract (if any) or at the rate set by Rule 36.7 of the Uniform Civil Procedure Rules 2005, whichever is greater. The current rate is also published on the NSW Local Court website.

If the respondent is not willing to pay all the money claimed, they have a maximum of 10 business days after you have submitted your claim to give you a payment schedule (a written statement of the amount they are willing to pay and the reasons for not paying any part of your claim). If they don't serve you with one in that timeframe, they must pay the whole claim.

If you have not been paid by the due date, you can serve on the respondent a written notice of your intention to suspend work. This notice must state that you are giving the notice under the Act. You may then suspend work two business days after the notice has been given. The respondent cannot claim any damages against you for suspending work. You may claim any loss you suffer as a result of the respondent removing work from your contract because of your suspension of work. Your right to suspend work continues until the end of 3 business days from when you have been paid by the respondent.